This is a guest post from Tom Crosthwaite, co-founder and Marketing Manager of Bobsled Marketing. Bobsled provides channel management across all key Amazon markets. To learn more, please go ahead and schedule an appointment.
Bobsled Marketing has seen the exponential growth of Prime Day (PD) over the last five years. We’ve developed and implemented a PD strategy for hundreds of partners and understand the significance of the opportunity.
At the time of publication, Amazon has yet to announce the date of PD 2019. However, based on historical precedence we can safely assume that the gigantic retail event will take place sometime in mid-July.
Each brand will have specific goals in respect to PD 2019, and this will inform the specifics of any strategic initiatives. However, there are certain guiding principles that dictate Bobsled’s in-house preparation efforts, which we’ve outlined in this article.
An easy and logical place for brands to start when preparing for PD 2019 is their own historical inventory and sales data. Data from past years provides useful insight regarding the popularity of different products, which type of promotions performed well, and how much additional inventory will be required to win big during the shopping frenzy.
And if possible, brands should delve deep into the profitability metrics of past PD results. Huge sales numbers are great, but they’re even better when there’s a healthy profit margin built in. Having an understanding of historical profitability will allow brands selling on Amazon to make astute decisions regarding which products to prioritize for PD 2019.
Source: Bobsled Marketing
Devise Your Promotional Strategy
Brands have the opportunity to submit for official PD deals, and submission deadlines vary depending on the nature of the deal and the platform (3P Seller or 1P Vendor).
If an official deadline has already passed, don’t panic – brands on Seller Central can elect to create their own “DIY” deals. Such deals involve Sellers manipulating their product listings to provide more value for money for the PD customer. Examples include Percentage Off offers, Free Shipping (if you always Merchant-fulfill) and Buy One Get One promotions.
PD also offers brands a fantastic liquidation opportunity. Due to the volume of traffic, inventory can be sold through very quickly if the price-point is attractive enough for PD shoppers.
“On Amazon, it’s about occupying more landscape, and it’s going to be cluttered, it’s going to be competitive, so you have to expect to see higher CPCs. Lightning Deals might not have a really high sell-through rate because of the competition, but if you’re targeting correctly, and evaluating your skews correctly, you’re going to see the biggest impact where it matters.”
— Rachel Street, Bobsled Advertising Manager
Get Your FBA Inventory Ready Early
Amazon recommends PD inventory is shipped to Amazon no later than June 27th this year. However, considering the huge volume of inventory that’s going to be processed during this period, we’d recommend getting your FBA (Fulfilled By Amazon) inventory as early as possible, ideally by mid-June.
In addition, it’s important to start thinking about your inventory replenishment strategy for the event and after PD is over. For example, if you manage to sell through all your FBA inventory, it would be ideal to immediately transition to FBM (Fulfilled By Merchant), so that you can continue to build on any traction generated by the event.
“From an inventory standpoint, Amazon has their official recommendation. They say have all your inventory in fulfillment centers by June 27th. I personally like to be better safe than sorry and not be trying to cut that deadline close. The main thing you need to be ahead of here is forecasting additional inventory coverage. Ideally, you have some data from prior years to understand the impact of Prime Day on your brand specifically.”
— Jordan Ripley, Bobsled Project Manager
Buy Box Control
The most thorough PD inventory management and promotional strategy can be severely undone if other parties are winning the buy box on your Amazon listings.
Bobsled’s recommended approach to buy box control is as follows:
- If you work with 3rd party retailers make sure they are aware of your PD plans, promotions and restrictions
- If your products are sold on other marketplaces, put a plan into place to protect Amazon PD efforts and pricing
- If there are unknown sellers currently on the product listings, now is the time to start working on brand protection solutions in order to maintain total buy box ownership by PD
PPC Plan of Attack
Competition for visibility goes into overdrive on PD, therefore it’s critical brands get their PPC strategy locked down at least 6 weeks prior to the event.
Firstly, brands should calculate margins to determine new budgets, bids, campaign structures and targeting methods that will capitalize on the increase in market volume leading up to PD, on PD and the week following PD. And it’s important to remember that any new campaigns will need time to ramp up – campaigns should be performing well prior to PD.
And just like any other time of year, round-the-clock campaign management and intelligent optimization that aligns with consumer behaviour is an absolute necessity. By resorting to a “set-and-forget” approach, brands may be overspending or leaving considerable market share on the table.
For more detailed PPC recommendations, listen to Episode 42 of Bobsled’s Ecommerce Braintrust Podcast here.
Source: Bobsled Marketing
It’s important to note that Prime Day 2018 spanned 36 hours (compared to 30 the year before) and resulted in the biggest day of sales in Amazon’s history. Amazon knows customers expect to find great deals on Prime Day, and it wouldn’t be surprising if the event’s duration was extended once again in an attempt to smash more records. Whatever the duration of Prime Day 2019 turns out to be, brands should be expected to deal with a higher volume of customer service inquiries due to the huge numbers of shoppers browsing the marketplace on Prime Day.
It can be helpful to think of PD as Q4 condensed into a short period of time. And a positive result can be a huge boon in the traditionally quieter Summer period.
If you are feeling lost, consider implementing some of the above tried and tested recommendations. Best of luck!